Michigan Real Estate Broker Exam — All Questions

Which Michigan department licenses and regulates real estate brokers?

• a.The Michigan Association of Realtors
• b.The Michigan Department of Treasury
• c.The Department of Licensing and Regulatory Affairs (LARA)✓
• d.The county register of deeds

Michigan real estate brokers and associate brokers are licensed by the Department of Licensing and Regulatory Affairs (LARA) under the Occupational Code, Article 25 (MCL 339.2501-2518). A trade association is a private membership group with no licensing authority, and the Treasury and register of deeds have no licensing jurisdiction.

Under the Michigan Occupational Code, which statement about an 'associate broker' is correct?

• a.It is another name for an unlicensed assistant
• b.The person has met broker qualifications but works under an employing broker rather than operating a firm✓
• c.It is the entry-level license below salesperson
• d.It authorizes the person to hold escrow independently of any broker

In Michigan an associate broker has satisfied the broker qualification and examination requirements but is employed by and works under a licensed employing (principal) broker rather than operating an independent brokerage. The employing broker remains responsible for supervision and trust funds. This mirrors the associate-broker structure used in several states.

In Michigan, a licensed salesperson or associate broker may lawfully receive compensation for licensed activity:

• a.Only from the employing broker who holds the license✓
• b.Directly from any buyer or seller
• c.From LARA as a disbursement
• d.From the title company at closing without the broker's involvement

The Michigan Occupational Code requires that compensation for licensed activity flow through the employing broker; a salesperson or associate broker may not be paid directly by a client or by the closing agent independently of the broker. Licensed activity is conducted for and in the name of the employing broker, which centralizes supervisory and financial responsibility.

A Michigan employing broker's duties include all of the following EXCEPT:

• a.Supervising affiliated licensees
• b.Maintaining any required trust/escrow account
• c.Retaining transaction records as required
• d.Guaranteeing each client that a listing will sell within 30 days✓

A Michigan employing broker must supervise affiliated licensees, maintain any required trust account, and keep transaction records available to LARA. No broker can guarantee that a listing will sell within a set time; doing so would be a misrepresentation. The broker's supervisory accountability is what distinguishes the broker tier from the salesperson tier.